USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 97-1253
RONALD J. TURNER, AS ADMINISTRATOR OF THE
ESTATE OF CHARLOTTE M. TURNER, AND INDIVIDUALLY,
Plaintiff, Appellant,
v.
FALLON COMMUNITY HEALTH PLAN, INC.,
Defendant, Appellee.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge]
___________________
____________________
Before
Boudin, Circuit Judge,
_____________
Hill,* Senior Circuit Judge,
____________________
and Pollak,** Senior District Judge.
_____________________
____________________
Burton Chandler with whom Seder & Chandler was on brief for
________________ _________________
appellant.
Daly D.E. Temchine with whom Thomas I. Elkind and Epstein Becker
__________________ ________________ _______________
& Green, P.C. were on brief for appellee.
_____________
____________________
October 20, 1997
____________________
____________________
*Of the Eleventh Circuit, sitting by designation.
**Of the Eastern District of Pennsylvania, sitting by designation.
BOUDIN, Circuit Judge. Ronald Turner, on behalf of
_____________
himself and as administrator of the estate of his deceased
wife, Charlotte Turner, brought this suit in Massachusetts
state court against Fallon Community Health Plan, Inc.
("Fallon"). The gravamen was Fallon's refusal to provide
coverage for a treatment regime proposed by Charlotte Turner
and her doctor to address her metastasized breast cancer.
After the case was removed to federal district court, the
district court granted summary judgment for Fallon, and
Ronald Turner appealed.
The pertinent facts are largely undisputed. In 1991,
Charlotte Turner was diagnosed with breast cancer. The
disease was at first treated by surgery, chemotherapy and
radiation. In May 1993, tests showed that the cancer had
metastasized, was beyond control by conventional therapies,
and threatened Charlotte Turner with death within 12 to 18
months. Ronald Turner was employed by General Motors, and
Charlotte Turner was covered by the health coverage that
Fallon provided for family members of General Motors
employees.
Fallon is a health maintenance organization that
provides or reimburses health care for its members. Its
"Member Handbook," which is presented as "part of [the
member's] contract with [Fallon]," describes in detail the
various medical costs that Fallon will cover for
-2-
-2-
beneficiaries. Among the express exclusions set forth in the
__________
handbook was "bone marrow transplant for treatment of solid
tumors . . . ." Dr. Ronald Hochman, Charlotte Turner's
oncologist at Fallon, nevertheless concluded that Charlotte
Turner's only hope was an autologous bone marrow transplant,
a procedure by which the patient's own bone marrow is
extracted, stored and then reintroduced after the patient
receives high dosage chemotherapy. Marrow is the source of
vital white blood cells needed to fight infection and without
the transplant procedure, the high dosage chemotherapy would
impair the bone marrow's ability to continue to produce white
blood cells.
In May 1993, Fallon approved Charlotte Turner's request
that she be evaluated by Dana Farber Cancer Institute for
possible participation in its bone marrow transplant program.
Fallon continued to assert that a bone marrow transplant was
not a covered procedure for solid tumor cancer but said that
if the treatment was recommended by Dana Farber, the request
for coverage would be reviewed further by Fallon.
Ultimately, Dana Farber concluded that Charlotte Turner was
not eligible for the Dana Farber protocol because cancer
cells had already been detected in Charlotte Turner's bone
marrow.
Charlotte Turner then asked Fallon to cover her
examination for eligibility to enter a program being
-3-
-3-
conducted by the Duke University Medical Center. In this
program, Duke not only removed bone marrow for
reimplantation, in aid of high dosage chemotherapy, but also
employed procedures to attempt to "purge" the marrow of its
cancer cells. Fallon declined to cover the cost of a "third
opinion." Charlotte Turner then had herself examined by
doctors at the Duke program who concluded that she might be
eligible to participate, subject to further testing. The
cost of her participation in the program was estimated at
$100,000.
In July 1993, Charlotte Turner and Dr. Hochman asked
Fallon to pay for her inclusion in the Duke program. In
August 1993, Fallon's Transplant Committee met to consider
Charlotte Turner's request and the broader question whether
coverage should be extended, on a case-by-case basis, to bone
marrow transplants to treat solid tumor cancers either under
the Dana Farber protocol or the Duke program or both. Dr.
Hochman supported Charlotte Turner's application for coverage
to the Duke program.
The Transplant Committee decided that, despite its
handbook exclusion, it would in the future extend coverage
for the Dana Farber protocol if it concluded in the
particular case that the treatment was critically necessary
and showed a strong likelihood of success. It concluded,
however, that the Duke program had as yet produced no
-4-
-4-
adequate data suggesting a likelihood of success, and
therefore declined to extend coverage for the Duke program.
At Charlotte Turner's request, Fallon's Grievance Committee
held a hearing in September 1993 to review the decision of
the Transplant Committee, but in early October 1993, the
Grievance Committee upheld the denial of coverage for the
Duke program.
Immediately after the Grievance Committee's decision in
October 1993, Charlotte Turner underwent conventional low-
dosage chemotherapy without bone marrow transplantation. She
died on August 17, 1994. Ronald Turner then brought suit in
the Massachusetts superior court against Fallon charging it
with breach of contract, wrongful death and other state-law
claims. Fallon removed the case to federal district court on
the ground that state-law claims were preempted under ERISA--
the Employee Retirement Income Security Act of 1974, 29
U.S.C. 1001 et seq. See Metropolitan Life Ins. Co. v.
______ ___ ___________________________
Taylor, 481 U.S. 58, 66-67 (1987).
______
Ronald Turner responded by amending his complaint to
delete the state claims and to substitute a claim under
ERISA. The amended single-count complaint charged that
Fallon's denial of coverage for the Duke program "denied
Charlotte of the rights and benefits due under the policy and
was arbitrary, illegal, capricious, unreasonable and not made
in good faith and was a breach of [Fallon's] fiduciary duty
-5-
-5-
which it owed to Charlotte." The complaint sought damages
and a trial by jury.
In March 1996, Fallon moved for summary judgment.
Ronald Turner opposed the motion and asked for further
discovery, which Fallon in turn opposed. The district court
then ruled that a civil ERISA action could be brought by a
plan beneficiary only (in the words of the statute) "to
recover benefits due to him under the terms of his plan, to
enforce his rights under the terms of the plan, or to clarify
his rights to future benefits under the terms of the plan."
29 U.S.C. 1132(a)(1)(B). Concluding that Ronald Turner's
damage action was not authorized by ERISA, the court ruled
that the case had to be dismissed and that further discovery
would be futile.
Ronald Turner then sought reconsideration and also
sought to amend the complaint to reassert the previously
withdrawn state-law claims. He argued that if ERISA provided
no federal remedy, it ought not be read to preempt his state-
law claims. Alternatively, he urged that if ERISA preempted
the state-law claims, then a federal remedy ought to be
inferred or created by the court to permit damages for
wrongful withholding of treatment under the employee benefits
plan. The district court wrote a thoughtful opinion denying
these requests.
-6-
-6-
On this appeal, we begin with Ronald Turner's claim that
ERISA should be read to confer a claim for damages where, as
charged in the amended complaint, a beneficiary of the plan
has been denied "the rights and benefits due under the
policy" or has suffered "a breach of . . . fiduciary duty" in
the withholding of those benefits. ERISA is a comprehensive
federal statute that governs not only pension plans but also
nonpension benefit plans, including the General Motors health
benefits plan at issue in this case.
ERISA sets forth a half dozen civil enforcement
provisions. 29 U.S.C. 1132(a). Under the first such
provision, a beneficiary may bring a federal civil action "to
recover benefits due to him under the terms of his plan, to
enforce his rights under the terms of the plan, or to clarify
his rights to future benefits under the terms of the plan."
Id. 1132(a)(1)(B). The relief expressly provided is to
___
secure benefits under the plan rather than damages for a
breach of the plan. Here, treatment coverage is no longer of
any significance.
The other pertinent remedial provision authorizes civil
action by a beneficiary "to obtain other appropriate
equitable relief" to address violations of ERISA or to
enforce the plan. 29 U.S.C. 1132(a)(3)(B). The Supreme
Court recently held in Varity Corp. v. Howe, 116 S. Ct. 1065
____________ ____
(1996), that this provision may permit equitable relief
-7-
-7-
against a plan administrator for breaches of the fiduciary
duty imposed on such administrators by ERISA. See id. at
________
1075-79. But this provision is expressly limited to
providing equitable relief, and equitable relief is not being
sought in this case.
Ronald Turner points to no other specific remedial
provision in ERISA that might arguably be brought into play
in this case. In fact, the Supreme Court has stressed that
ERISA does not create compensatory or punitive damage
remedies where an administrator of a plan fails to provide
the benefits due under that plan. See Massachusetts Mut.
___ __________________
Life Ins. Co. v. Russell, 473 U.S. 134 (1985); see also
______________ _______ _________
Drinkwater v. Metropolitan Life Ins. Co., 846 F.2d 821, 825
__________ ___________________________
(1st Cir.), cert. denied, 488 U.S. 909 (1988). This is not a
____________
minor technicality: damage awards may increase effective
coverage but may also add significantly to the costs of
coverage.
The lack of an express damage remedy under ERISA does
not necessarily end the story. The federal courts have
regularly inferred or created remedies in the shadow of
federal statutes, although the practice has waned somewhat in
recent years. See, e.g., Northwest Airlines, Inc. v.
__________ __________________________
Transport Workers, 451 U.S. 77, 94 (1981). But the Supreme
_________________
Court has adamantly ruled that ERISA's express remedies are a
signal to courts not to create additional remedies of their
-8-
-8-
own. Russell, 473 U.S. at 145-48. See also Reich v. Rowe,
_______ ________ _____ ____
20 F.3d 25, 31-33 (1st Cir. 1994); Drinkwater, 846 F.2d at
__________
824.
In the alternative, Ronald Turner argues that ERISA, if
it provides no damage remedy of its own either expressly or
by implication, should at least not be taken to preclude
existing state remedies. Absent preemption, a health
benefits plan like Fallon's could certainly be treated as a
contract enforceable under state law and subject to the usual
contractual remedies, including compensatory damages.
Depending on the jurisdiction, state law might provide even
more substantial relief, including punitive damages.
ERISA contains a vague but broadly worded preemption
provision. With exceptions not relevant here, it provides
that the pertinent subchapter of ERISA shall supersede any
and all "State laws insofar as they may now or hereafter
relate to any employee benefit plan" covered by ERISA. 29
U.S.C. 1144(a). However this general language might
otherwise have been read, the Supreme Court has construed it
to preclude state claims to enforce rights under an ERISA
plan or obtain damages for the wrongful withholding of those
rights, Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 52-57
____________________ _______
(1987), and this construction has been repeatedly followed.1
____________________
1See, e.g., Ingersoll-Rand Co. v. McClendon, 498 U.S.
_________ __________________ _________
133, 144 (1990); Carlo v. Reed Rolled Thread Die Co., 49 F.3d
_____ __________________________
790, 794 (1st Cir. 1995); Rosario-Cordero v. Crowley Towing &
_______________ ________________
-9-
-9-
The Supreme Court has recently set some new limits on
preemption by holding that certain state laws were not
sufficiently "related" to ERISA to deserve preemption. See
___
De Buono v. NYSA-ILA Medical & Clinical Servs. Fund, 117 S.
________ ________________________________________
Ct. 1747, 1752-53 (1997); California Div. of Labor Standards
__________________________________
Enforcement v. Dillingham Constr., N.A., 117 S. Ct. 832, 842
___________ _________________________
(1997). But neither of these cases involved a state's
attempt to provide state remedies for what is in essence a
plan administrator's refusal to pay allegedly promised
benefits. It would be difficult to think of a state law that
"relates" more closely to an employee benefit plan than one
that affords remedies for the breach of obligations under
that plan.
Ronald Turner more or less admits that existing Supreme
Court precedent is against him, both as to an implicit
federal cause of action and the preemption of state claims.
But he says that it is grossly unjust to deny any remedy,
either state or federal, to compensate in damages the victim,
family or estate of one who has been wrongfully denied
promised health-care benefits. Further, he argues that this
gap provides a cruel incentive for plan administrators to
withhold treatment or delay it as long as possible, since the
____________________
Transp. Co., 46 F.3d 120, 126 (1st Cir. 1995); Nash v.
____________ ____
Trustees of Boston Univ., 946 F.2d 960, 964 n.8 (1st Cir.
_________________________
1991); Wickman v. Northwestern Nat'l Ins. Co., 908 F.2d 1077,
_______ ___________________________
1082 (1st Cir.), cert. denied, 498 U.S. 1013 (1990).
____________
-10-
-10-
claim for benefits may be mooted by the beneficiary's death.
There are in reality two quite different problems of law
and policy entangled in this argument. The one that Ronald
Turner seeks to present is the case of a beneficiary
wrongfully denied promised benefits. There is reason to
doubt that that is the true problem in this case (a point to
____
which we will return), but such cases are easy to imagine and
certain to occur. Compensatory damages are a conventional
and potent remedy that might indeed deter misconduct and
mitigate loss, although the cost of the plan would also be
increased.
On the other hand, some might think it perverse to dwell
on damage remedies, which apply where the patient has died or
already suffered injury, and might urge instead that courts
improve access to equitable relief. This remedy, already
_________
available under ERISA, can address a wrongful denial of
benefits while the patient is still alive and unharmed.
Although Ronald Turner says that such judicial relief is
readily frustrated by exhaustion of remedies rules, a failure
to exhaust is easily forgiven for good reason, and no reason
is better than an imminent threat to life or health. E.g.,
____
Portela-Gonzalez v. Secretary of the Navy, 109 F.3d 74, 77
________________ ______________________
(1st Cir. 1997); see also DePina v. General Dynamics Corp.,
________ ______ ______________________
674 F. Supp. 46, 49 (D. Mass. 1987).
-11-
-11-
In all events, it is certainly a matter for reasonable
debate whether a damage remedy should be added, either by
judicial interpolation or by Congress. But only the Supreme
Court could alter the existing case law that precludes such a
remedy. And whether or not Congress ever thought about the
impact on health care in particular when it wrote ERISA's
remedies and preemption provisions, Congress is well equipped
to revisit the issue and alter the statutory language that
now stands as a bar.
Although the question of a damages remedy is an
important one, it likely has n
